There's Too Much Debt, Here's What to Do: Kyle Bass

Kyle Bass, who famously made a fortune shorting the subprime market before the housing market collapse, is worried that there's too much debt in the world.

Source: Hayman Capital Management LLC

Kyle Bass

“We’ve never been here before,” said Bass, founder of hedge fund Hayman Capital, in an interview Wednesday on CNBC'S “Squawk on the Street.” “It has been the largest peacetime accumulation of debt in history.”

And that makes investment decisions extremely difficult, Bass said.

After shortingsubprime residential mortgage-backed securitiesbefore the the housing bust, Bass now has about half his portfolio in subprime and partly subprime mortgage bonds.

“We had a hyper-leveraged economy and world going into the financial crisis," Bass said. "We lost trillions and trillions of dollars because of that leverage. The first several trillion dollars that were printed just replaced what was lost” and had no net effect on global money supply.

But subsequent printing, which is where we are today, starts to affect the economy, Bass said, pointing to rising inflation in Southern Europe and slowing economic growth.

Bass also had little confidence U.S. and European politicians would be able to solve their respective debt issues.